eStar winds up operations

July 12 2002

Online share trading company eStar will wind up its operations after failing to make enough revenue to stay viable, the company told the ASX today.

Directors requested a trading halt on shares in the listed company today, saying the business was unable to break even in the competitive retail share trading market despite its superior online trading platform.

"During the past 18 months, eStar has been operating in a very competitive market."

"While initiatives were implemented to reduce the cash burn, revenues have not increased sufficiently to allow the operations to break even for any sustainable period or ensure that the company is viable going forward in the short term," the company said in a statement.

eStar raised $20 million from its intitial public offering when it was listed on the market in August 2000.
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Losses continued to accumulate and have averaged approximately $85,000-$90,000 per month in recent months, the company said.

eStar will stop providing online trading services on 30 August, 2002. The company's directors have arranged for AOT Online to take on its customers.

"Management will be working closely over the next few weeks with all existing eStar clients and suppliers to ensure that there is an orderly wind down of its current operations," eStar's directors said.

The company is reviewing options for possible alternative uses for its eStar platform and will consider alternative business activities.

eStar has approximately $10 million in cash available for investment into projects it hopes will not only generate profits, but also grow the assets of the company so as to restore some value to the shareholders investment, the company's directors said.